Indian consumers with a knack for technology are propelling individuals to stardom in the consumer tech industry.

Today’s Indian consumer is likely reading this article on their mobile phone while riding in an Ola or on a laptop during a work break. The modern consumer in India expects more than just meeting their basic needs – they seek luxury, entertainment, and quality experiences when shopping or making payments.

This is why emerging markets like India stand out in the vast consumer tech landscape as hotbeds of entrepreneurship, with many startups disrupting traditional industries and attracting significant funding.

A combination of higher disposable income and digital adoption are driving India’s consumer technology industry. According to a recent report by Chiratae Ventures, the value of the consumer technology industry will reach US$300 billion by 2027. Every day, more than 500 million Indian consumers actively search for entertainment and gaming services online.

“Digital is everywhere these days and its utility is increasing day by day,” says Roma Datta Chobey, Managing Director, Digital First Businesses, Google India.

Scalability and Growth Potential of Indian Consumer Technology Startups

The state of a country’s consumer technology market speaks volumes about its consumers. The modern digitally savvy Indian consumer has a range of options across all industries. And this means an irresistible opportunity for investors.

Kevin Siskar, the founder and CEO of Finta, which acts as a financial copilot for startup founders, says that when evaluating a startup’s potential, investors take into account the size of the market, innovations, the viability of the business model and the technological infrastructure. And India has it all.

“India has a rapidly growing and digitally engaged population coupled with the growth of innovative consumer technology start-ups, which means huge potential for scalability. The real test is the company’s ability to find product market fit and a strong market entry strategy in a rapidly developing market,” he says.

In the second week of January 2024, Indian startups raised $145 million in funding, up 150% from the first week of the year. This includes former Twitter/X CEO Parag Agrawal, who raised $30 million for his new AI venture. Others include awards-focused mobile internet browser Veera, which raised $6 million, Bollywood actor Sonu Sood’s travel-focused social media platform Explurger, which raised INR 37.3 million, and digital banking platform Freo, which raised an undisclosed amount.

Trends in the Consumer Tech Startup Sector

About. 1.1 billion Indian consumers with bank accounts are interested in investing in financial services. Today, about 880 million Indians tend to spend money on fashion and clothing, and about 220 million on on-demand services. The result is an increased focus on personalization, the growth of experiential retail and, of course, the growing influence of social media.

“The rise of personalization is a big trend in 2024,” says Siskar. “Consumers are demanding products tailored just for them, both offline and online. In this decade, the rise of artificial intelligence will take this opportunity to provide personalized experiences on an unprecedented scale.”

Personalized digital experiences are becoming a priority for Indian consumers.

“These consumer expectations extend to Tier 2+ consumers who have embraced technology and are more open to trying new brands and products, and willing to spend on personalization and rewards,” says Chobey.

Competitive landscape for consumer tech companies in India

India’s consumer technology industry, including EdTech, ride-hailing, FinTech, gaming and entertainment, food delivery, e-commerce, health technology and fitness, offers a wide range of investment opportunities. With India’s population supporting Internet penetration, growth in these sectors is exploding with changing consumer preferences and technological advancements.

Sudhir Sethi, founder and chairman of Chiratae Ventures, which has invested around $450 million in India’s consumer sector, says, “We believe that the consumer technology sector is both a horizontal and a vertical play with winners at the intersection of horizontal technology disruption and verticals like health, finance, education, agriculture, etc. .

Chiratae has invested in: Flipkart, Myntra, Cult.fit, Firstcry, Lenskart, GlobalBees, Policybazaar, PlaySimple, Curefoods, Fibe and Rentomojo.

EdTech platforms such as BYJU’S, Unacademy and Physics Wallah are revolutionizing education provision, especially in the post-pandemic era. Ride-sharing services like Ola are changing urban transportation, and recent new entries like Meru, ONN Bikes and BookMyCab have gained visibility. FinTech companies like Paytm, PhonePe and Razorpay are streamlining financial transactions, leveraging India’s digital payments revolution.

As gaming grows into an Indian pastime, gaming and entertainment platforms like Nazara Technologies and Dream11 are benefiting from the growing demand for immersive digital experiences, while food delivery startups like Zomato, Swiggy and DoorDash and e-commerce startups like Flipkart, Myntra. , and Meesho, shape retail and dining experiences. Health tech and fitness startups like HealthifyMe, Practo, and Doceree are leveraging technology to promote wellness and improve access to healthcare.

As a result, investment will come, and not just from the shores of India. “Thanks to the increased connectivity through software, in 2024 investors will be more and more open to funding startups from different places, unlike the times when you had to go to an investor’s roadshow and physically shake hands in person,” Siskar points out.

In India’s dynamic consumer technology environment, investors are looking to capitalize on various sectors that are poised for explosive growth driven by innovation and changing consumer behaviours.

“We’re going to continue to see consumer tech launches from big companies — and at the same time, the ripple effect of executives leaving the Fortune 500 to start new companies, and we’re going to see new innovations in consumer tech from there as well,” he adds.

He also points out that over time, when experienced talent leaves one company to start their own new business, the developing ecosystems flourish. “It’s one of the most important ways that exponential growth can happen to develop a local landscape over ten or twenty years,” he says.

India’s consumer technology sector is brimming with innovation and potential and is attracting significant investment from both domestic and international players. With a large and growing market, a favorable regulatory environment and a pool of talented entrepreneurs, India can become a breeding ground for technology startups that can make a global impact.

As these companies chart their growth paths, they are not only reshaping industries, but also redefining the future of consumer technology in emerging markets. So expect much more comfort and luxury in the future.